Indy 500 fights to get back in the race

It’s running a spirited campaign for sponsors lured away by Nascar

SamMamudi

Bryan Herta Autosport driver Dan Wheldon of England drives during a qualification attempt for the 95th running of the Indianapolis 500 at the Indianapolis Motor Speedway May 21.

NEW YORK (MarketWatch) — As the Indianapolis 500 rounds the century milepost, those with close ties to the race aim to mark the anniversary by revving up sponsorship and the roar of its fan base.

Over the past 15 years, the open-wheel race surrendered its top-dog status among U.S. motor-sports fans to Nascar’s rapidly growing stock-car series. After healing a damaging split between rival bodies, the Izod IndyCar Series believes it is back on track.

But it’s a tough road. Last year’s Indy 500 television audience of 5.8 million was the lowest of the decade, below even the average 7.5 million viewers that a Nascar Sprint Cup race enjoys. Last month’s Kentucky Derby, a sporting event comparable to the Indy 500, had almost 15 million viewers.

“Not too long ago, the Indy 500 was right up there with the Super Bowl — a staple in the American sports consciousness,” said Dale Song, a director at Optimum Sports, a unit of Omnicom Group Inc.
OMC, +1.69%
“While history and tradition will always be discussed and remembered every spring, it is a far cry from its levels of popularity a few short decades ago.”

IndyCar lost its place at sport’s top table after a split in the mid-1990s that led to competing series of open-wheel car racing. Ratings took a hit, and the move also hurt the hunt for sponsors.

After the split, “what ended up happening is one of the first questions you’d get either on the phone or when you walked in the door was, ‘What series are you with?’ And really that was the point where I think I looked at it and said, ‘We have a huge problem here,’” said Scott Goodyear, a former driver and one of the color commentators for this year’s race.

With the series now unified under the IndyCar banner, Goodyear said he sees progress.

“I think moving forward, there is no confusion not only for the sponsors, but more importantly probably the fans,” he said. “Now they believe they are watching everybody on one track, they are watching the best, and there is no controversy about what they’re looking at.”

That positive note was echoed by IndyCar’s main sponsor, Izod, part of Phillips-Van Heusen Corp.
PVH, -1.61%

Mike Kelly, executive vice president of marketing for Phillips-Van Heusen — which is in the third year of a 10-year deal with the sport — said the decision to partner with IndyCar showed faith in the sport’s ability to bounce back.

“We felt Nascar was post-peak [in popularity] and also too great an investment for the return we’d get; it’s very crowded,” said Kelly. “When we looked at IndyCar, we saw the product itself was amazing, but the relationship with the fans had been damaged, which gave us pause. But then we realized it has such rich assets [the history and the cars], and we could get to the young males we were trying to get.”

Kelly wouldn’t reveal the financial terms of the arrangement with IndyCar.

Building up the fan base

IndyCar faces a challenge today in part because its drivers aren’t as famous as the stars of yesteryear.

“There was a time when open-wheel drivers were household names — Mario Andretti, the Unser brothers, Rick Mears, A.J. Foyt, to name a few,” said Song. “Now when folks talk about racing cars, names like [Nascar drivers] Jeff Gordon, Jimmie Johnson and Dale Earnhardt Jr. are the names discussed.”

IndyCar’s most famous driver is arguably 29-year-old Danica Patrick, though recent reports have suggested she’s moving to Nascar next year.

“Danica is but one asset,” said Kelly.

Another is Simona De Silvestro, a 22-year-old Swiss female driver for whom many in the sport predict big things.

“Simona is the real deal,” said Marty Reid, who will be the lap-by-lap announcer for ABC’s coverage of Sunday’s race.

With sponsors coming back to the sport — last year, the list grew to 40 from 25 — Kelly said there will be added marketing heft behind the drivers in years ahead.

“They’ll get seen and eventually will become household names,” he said.

As for Izod, Kelly says the brand is benefiting from the sponsorship in several ways. He said metrics for fan awareness weren’t yet available, but noted, for example, that when an IndyCar series race comes to town, the company sees sales jump 50% to 100% in the weeks surrounding the event.

And then there’s what he called the power of the paddock: business connections made with other companies involved in the sport.

Izod recently partnered with Honda Motor Co.
HMC, +1.02%
for an advertisement featuring Andretti. The national campaign benefited from Honda’s hefty ad budget, which is far greater than a clothing company can afford, said Kelly.

“Our relationship with Macy’s Inc.
M, -1.46%
has also grown,” he added. “We never had the kind of presence on store floors that we now have because of our IndyCar campaign.”

Part of the campaign is displaying Indy racing cars in Macy’s stores — $200 million worth of cars and racing equipment occupied space in Macy’s flagship Manhattan store alone for all of May.

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